John Lechleiter - Chairman, President, and CEO Derica Rice - EVP, Global Services, and CFO Jan Lundberg - EVP, Science and Technology, and President, Lilly Research Laboratories Ilissa Rassner - Director, IR Travis Coy - Director, IR Phil Johnson - VP of IR

Steve Scala - Cowen & Co. Mark Schoenebaum - ISI Group Chris Schott - JPMorgan Jami Rubin - Goldman Sachs Gregg Gilbert - Bank of America David Risinger - Morgan Stanley Tim Anderson - Sanford Bernstein John Boris - SunTrust Robinson Humphrey, Inc. Vamil Divan - Credit Suisse Marc Goodman - UBS Alex Arfaei - BMO Capital Markets Seamus Fernandez - Leerink Swann Jeff Holford - Jefferies & Company

Ladies and gentlemen, thank you for standing by and welcome to the Q4, 2013 Earning Conference Call. At this time, all participants are in a listen-only mode. And later we will conduct a questions-and-answer session with instructions being given at that time. (Operator Instructions) As a reminder, today’s conference is being recorded. I’d now like to turn the conference over to our host, Vice President of Investor Relations, Mr. Phil Johnson. Please go ahead, sir.

Thank you. Good morning and thank you for joining us for Eli Lilly & Company's fourth quarter 2013 earnings conference call. I’m Phil Johnson, Vice President of Investor Relations. Joining me on today’s call are John Lechleiter, our Chairman, President, and CEO; Derica Rice, our Chief Financial Officer, Dr. Jan Lundberg, our President of Lilly Research Laboratories and Ilissa Rassner and Travis Coy of the Investor Relations team. I would like to call out that this is Travis’s last earnings call with us. Before he transitions to the financial leadership role of our oncology business, we’d like to thank him for his efforts in furthering our work with investors in Wall Street over the last two years. Thanks Travis. Now during this conference call, we anticipate making projections and forward-looking statements based on our current expectations. Our actual results could differ materially due to a number of factors, including those listed on Slide three and those outlined in our latest forms 10-K and 10-Q filed with the Securities and Exchange Commission. The information we provide about our products and pipeline is for the benefit of the investment community. It is not intended to be promotional and is not sufficient for prescribing decisions. Let me begin today’s call by highlighting a few of that that have occurred since last quarter’s call. In clinical news, at the ASCO GI meeting earlier this month, a detailed data was presented for RAINBOW. The second positive Phase 3 ramucirumab trial which will increase overall survival in patients with advanced gastric cancer. We were pleased with how these data were received by the medical community and we look forward to submitting the data to regulators later this year. We were disappointed that the Phase 3 studies for edivoxetine, which has been studied as an adjunctive therapy for patients with major depressive disorder did not achieve their primary endpoints. On the regulatory front, Q4 caps off a busy year as we completed three more submissions and received a label expansion. We submitted our new insulin glargine product in collaboration with Boehringer Ingelheim for regulatory authorities in both the United States and Japan. We also submitted a marketing authorization application for insulin lispro U-200 to the European Medicines Agency. And we received approval to update the U.S. Cialis label to include the use of once daily Cialis 5 milligrams with finasteride to improve urinary symptoms in patients with benign prostatic hyperplasia. In business development, we entered into collaboration agreement with Pfizer to jointly develop and commercialize tanezumab, for the potential treatment of osteoarthritis pain, chronic low back pain, and cancer pain. And earlier this month, we announced the acquisition of CGRP antibody in Phase 2 for migraine prevention from Arteaus Therapeutics. We are very excited about the clinical data underpinning this decision and look forward to publishing them in a leading medical journal. We also enter the final year of what we’ve called “Years YZ” with the loss of U.S exclusivity for Cymbalta, in December. Cymbalta generated more than $5 billion in worldwide sales last year, making it one of the most commercially successful neuroscience brands in our industries history and one of only 20 brands including Zyprexa to exceed $5 billion in sales in a single year. While we had not originally intended to pursue an authorized generic for Cymbalta, we did recently enter into an AG agreement with Prasco to provide a limited quantity of duloxetine. This will have a minimal positive impact on our 2014 revenue. Finally, during Q4, we executed share repurchases totaling $500 million under our recently authorized $5 billion share repurchase program. For the full year, we distributed nearly $4 billion to shareholders through dividends and share repurchases. Now let’s discuss our financial performance for the quarter and the full year 2013. I will provide comments about our GAAP results and then discuss a few non-GAAP measures, to provide some additional insight into the underlying trends in our business. On Slide 6, you can see that revenue in Q4, 2013 was nearly $6 billion or 2% below Q4, 2012. We are pleased with the double-digit growth for Humalog, Cialis, Forteo, Strattera and Evista and the Tradjenta revenue more than doubled. The strong revenue performance nearly offset lower U.S Cymbalta sales. Excluding Cymbalta in the U.S the rest of our worldwide revenue grew nearly 9%. Gross margin as a percent of revenue decreased 2.9 percentage points driven by the loss of Cymbalta’s U.S exclusivity and by the impact of foreign exchange rates on international inventory sold, partially offset by higher prices. This quarter foreign exchange rates on international inventory sold have a negative impact on our gross margin. However, in Q4, 2012, foreign exchange rates on international inventory sold provided a benefit to our gross margin. Excluding this FX effect from both 2012 and 2013, gross margin as a percent of revenue declined from 78.5% to 77.0% or 1.5 percentage points. As in past quarters, we’ve included a supplementary slide providing our gross margin percent for the last 10 quarters with and without this FX effect. Non-GAAP measures are shown on Slide 7. Total operating expense defined as the sum of R&D and SG&A was flat versus Q4, 2012. Marketing, selling and administrative expenses were down 1%, while R&D was up 1%. The reduction in marketing, selling and administrative expenses was due to the restructuring of a U.S commercial organization that occurred in mid 2013, lower marketing expenses for Cymbalta in the U.S and the favorable impact of foreign exchange rates partially offset by increased marketing spend on other products. The growth in R&D expenses was driven by both research and clinical development activity partially offset by lower milestone payments. As mentioned on our 2014 guidance call, we expect a late stage clinical trial cost to decline substantially this year. Other income and expense was net income of $9 million in Q4, 2013 compared to a net expense of $52 million in the fourth quarter 2012. This difference is primarily due to milestone payments totaling $40 million received from Boehringer Ingelheim for the submissions of our insulin glargine product in the United States and Japan. Our tax rate was 20.5%, a decrease of 1.8 percentage points compared to the same quarter last year, primarily due to the lapse of the R&D tax credit in 2012. At the bottom line, net income declined 16%. The smaller decrease in earnings per share of 13% reflects the benefit of share repurchases. Ilissa?

Thanks, Phil. Let me highlight a few full year results shown on Slide 8. Revenue increased 2% driven by growth of Humalog, Tradjenta, Alimta, Forteo, Cymbalta, Strattera and Humulin. Total operating expenses in 2013 decreased 1% driven by lower selling and marketing expenses, partially offset by a 5% increase in R&D expenses. Finally, net income increased 19% and EPS increased 22%. The dynamics in our full year results reflect the execution of our strategy for managing one of the industries most challenging theories of patent expiration. Driving strong performance in our growth areas and in our marketed brands that retain patent protection, while increasing productivity across our business to fund R&D necessary to fuel our future growth. Our fourth quarter results remind us that 2014 is the most financially challenging year in this YZ period. We are prepared for this challenge and our position to return to growth and expand margins in 2015 and beyond. Slide 9 provides a reconciliation between reported and non-GAAP EPS. Additional details about our reported earnings are available in today’s earnings press release. Moving to Slide 10, you can see the total revenue decline of 2% in Q4, 2013 shown in the yellow box on the middle of the page, was driven by a negative volume impact of 5% and a negative foreign exchange impact of 2% partially offset by a favorable price impact of 4%. By geography you will notice that U.S volume decreased 17%. This is due to the loss of exclusivity for Cymbalta. Excluding Cymbalta, U.S pharma volume increased more than 5%. In Australia, Canada and Europe or ACE, you will see a negative 5% price impact. This quarter’s price decline in ACE was slightly higher than prior quarters since we’re no longer recognizing amortization of the upfront payment by Daiichi Sankyo for Evista rights. Favorable adjustments in a number of countries in Q4, 2012 also led to a negative year-on-year comparison. Excluding these items, the price decline in ACE is consistent with prior quarters' declines. In Japan, we had another quarter of very strong volume growth, up 17% driven primarily by Evista, Forteo, Tradjenta, Strattera, Zyprexa and Cymbalta. That strong volume growth was again offset by the weakening of the yen. We expect this robust growth to continue in 2014 as many of these products have several years of exclusivity remaining. Turning to emerging markets, we are pleased with the revenue growth of 7% in the face of a 4% negative impact from foreign exchange. Volume growth was a robust 13% driven by strong performance in many countries in Latin and South America, the Middle East and Africa. China volume grew 7%. Elanco Animal Health delivered revenue growth of 4%. Excluding FX, Elanco grew 6% in performance terms. This performance growth was driven by higher prices for both food and companion animal products as well as by volume growth for food animal products. This was partially offset by a volume decline for companion animal products. Overall, we continued to be pleased with Elanco performance and our well positioned to continue to outperform the industry. Slide 11 shows the effect of changes in foreign exchange rates on our 2013 results. For both Q4 and full year 2013, FX had a negative effect on revenue growth. In terms of cost of goods sold, we saw a smaller benefit from the FX effect on international inventory sold in 2013 versus 2012. As a result, foreign exchange had a substantial negative effect on growth and operating income and earnings per share. Now, let me turn the call over to Derica.

Thanks, Ilissa. Slide 12 shows our pipeline as of January 23. Changes since our last earnings call are highlighted with green arrows showing progression and red arrows showing attrition. You notice that we've removed liprotamase from the pipeline. Given our corporate investment priorities, Lilly will not be pursuing further development of this molecule. We began Phase 2 testing of the tau imaging agent that is being developed by our Avid radiopharmaceutical subsidiary. We started Phase 1 testing for five assets and as Phil mentioned earlier, we added Tanezumab to our Phase 3 portfolio to a collaboration with Pfizer. Finally, we terminated Phase 3 development of Edivoxetine and discontinued development of three Phase 2 assets and one Phase 1 asset. With the number of encouraging data readouts in 2013, eight assets in Phase 3, four assets under regulatory review and more submission as possible this year, we're confident in our ability to return to growth post 2014. I would also like to point out that last month, we completed enrollment and accelerate the Phase 3 trial evaluating evacetrapib in patients with established atherosclerosis at high risk for experiencing a cardiovascular event. We successfully expedited this trial enrolling 12,000 patients in just over 12 months. As a result, we have accelerated the last patient visit for this study to January of 2016. This is a great achievement by our evacetrapib team and we believe this speaks to the significant unmet patient need. Based on lowering of LDL alone, we believe it is possible to achieve the primary endpoint with significant statistical power. We're also encouraged by the pharmacokinetic profile of evacetrapib as we've observed no clinically meaningful blood levels of the drug at four to six weeks after discontinuation. We continue to be optimistic about the potential for this molecule to reduce CV events in the patient population being steady. Also, just last week results were published in the New England Journal of Medicine from the EXPEDITION and EXPEDITION 2 studies evaluating Solanezumab in patients with mild to moderate Alzheimer's disease. You may recall that in a pre-specified secondary analysis of patients with mild Alzheimer's disease pooled across both studies, we saw a 34% reduction in cognitive decline as measured by ADAS-Cog14 and we saw an 18% reduction in functional decline as measured by ADCS-IADL. We're now conducting a study called EXPEDITION 3 targeted to specifically a patient that we believe are most likely to benefit from treatment with Solanezumab. Patients with mild Alzheimer's disease will test positive for the presence of amyloid pathology. In August of last year the first patients were dosed in this study and we continue to target study completion by the end of 2016. Currently, there are no treatments for Alzheimer's that impact the underlying disease and we remain encouraged by the Solanezumab data. While we understand investor interest will be focused on near-term launches and our diabetes and oncology businesses, with mid-term launch opportunities coming from our autoimmune portfolio, we do not want you to lose sight of these important opportunities for potential first-in-class medicines later this decade. Next, let me provide a recap of how key events played out in 2013, remind you of our key events for 2014 and quickly review our 2014 financial guidance. Now as has become customary when we roll out our full year financial guidance, we provide you a list of key events for the year. And we update this list quarterly so you can track our progress. As illustrated by the green checkmarks on Slide 13, you can see that we made significant advances in our pipeline in 2013. We had positive data readouts for five Phase 3 assets and completed regulatory submissions for four, while continuing to expect the necitumumab submission to be completed by the end of this year. We initiated the Phase 3 study for Solanezumab in patients with mild Alzheimer's disease. We defended Alimta method-of-use patent in a district court in Indianapolis, and as Phil mentioned we've entered the final year of Years YZ with the expiration of Cymbalta's U.S. patent. 2013 was a very productive year and we expect 2014 to be another busy year with significant pipeline activity and the potential for multiple product launches. While I will not go through each item on Slide 14, we're excited about the opportunities we have to continue to advance our pipeline and the shared data that will not only help investors better judge our growth potential, but also convey why we view this year as a new beginning in the next phase of Lilly's rich history. We have the potential to initiate Phase 3 studies for two assets; our CDK4/6 inhibitor for cancer and our anti-sclerostin antibody for osteoporosis. With respect to Phase 3 data, we expect internal data readout leading to top line press releases or external detailed data disclosures for six of the eight Phase 3 assets and for all four of the assets that are in the regulatory review. We also expect regulatory action for each of those four assets. With respect to Alimta method-of-use patent, we anticipate a ruling in the first half of this year. Now as a reminder, regardless of the district court decision, we would expect one or more appeals to be made to the court of appeals for the federal circuit before litigation is resolved. And finally, we will lose patent protection for Evista in the U.S. in March and data package exclusivity for Cymbalta will expire in Europe in the second half of this year, although we do not expect generic duloxetine to enter the European market until 2015. Now moving on to our financial guidance for 2014, we are reconfirming the 2014 guidance that was issued earlier this month. If you are looking for additional color commentary on our 2014 guidance, please refer to today's press release as well as the Investor section of lilly.com where you'll find the slides and audio from our January 7 guidance call. Slide 16 provides a reconciliation between reported and non-GAAP EPS for 2013 and the associated growth rates from these numbers to our 2014 guidance. In summary, we're pleased with the progress we made in 2013 implementing our three strategic priorities. One, replenishing and advancing our pipeline; two, driving strong performance of our marketed brands in key growth areas and three, increasing productivity and reducing our cost structure. Our 2013 financial results was strong. Eight of our products exceeded $1 billion in annual sales. Japan and China delivered double-digit volume growth and Elanco continued to exceed overall industry growth. As Phil stated earlier in the call, excluding Cymbalta in the U.S., our world-wide revenue grew a robust 9% in Q4. This strong performance combined with our discipline in managing costs generated nearly $6 billion of operating cash flow, covering capital expenditures of $1 billion our dividend of $2.1 billion and $1.7 billion of share repurchases. As we turn to this year we anticipate a number of clinical trial readouts, data presentations and regulatory submissions. Most important we also expect to launch multiple products with more to follow in the coming years allowing Lilly to return to growth and expand margins post 2014. So as I said on our guidance call earlier this month, far from seeing 2014 as the low point in our journey through one of the industries' most challenging patent cliffs, we see this year as an inflection point leading to our bright future. We continue to believe that our innovation strategy is the right one to benefit patients and create value for our shareholders. We look forward to providing more updates as we continue to execute this strategy. This concludes our prepared remarks and now we’ll take your questions. Operator, the first caller please.

Thank you. (Operator Instructions) We’ll go to the line of Steve Scala with Cowen. Please go ahead. Steve Scala - Cowen & Co.: Well, thank you. I have three questions. First, the R&D as a percent of sales in Q4 is the highest it's been in at least a decade and higher than the YZ guidance and 2014 guidance. So what were the particular dynamics around this spend in Q4. Secondly, assuming that Sanofi does sue Lilly in the next few days over the filing of the insulin glargine biosimilar; do you believe that they will enjoy the full 30 months or does Lilly believe a quicker resolution can be gained? And then lastly your comment about the blood levels of either cetrapib four to six weeks after a discontinuation, I guess was meant to contrast it with anacetrapib’s very long half-life, other than some theoretical concern about long half-life’s. What specifically should we be concerned with anacetrapib? Thank you.

Steve thanks for the question. So for the R&D percent we’ll have, Derica provide a comment there. I’ll then comment on the Sanofi question, maybe let Jan comment for the anacetrapib accumulation comment from the call text. Derica.

Sure. Hi, Steve, good morning. Hey, when we look at our Q4 spend, we are very pleased with how we came in. As it relates to R&D that spend was driven by additional investments in our research as well as some clinical development. And we did have the opportunity to make some incremental investments in the fourth quarter both in R&D as well as in SGA and some of that was also in preparation for the upcoming launches that we anticipate later this year in 2014.

And then Steve, this is Phil, for your question on Sanofi and whether should they sue us; they would enjoy the full benefit of the 30 months, for the 30 month stay. At this point it's premature to speculate on how that may play out. We have as its required notified Sanofi of our acceptance of our filing with the FDA, and that’s where things stand as of today. So there maybe more developments in the future, but it will be premature to comment at this time. Jan?

Regarding the half-life’s, we see this more as a general comment here that most medicines on the market today be category as small molecules usually have a short half-life which is actually what you want, should there be any unforeseen side effects and always when you do large Phase 3 clinical trials, that this isn’t unknown until you have all the data. So, I think you should see this just as a very unusual situation that you have a small molecular agent with this very long half-life that anacetrapib has and it remains to be seen. Now then if there are any side effects, what is the consequences?

Thank you, Jan. Akhili, next caller please.

We’ll go to the line of Mark Schoenebaum with ISI Group. Mark Schoenebaum - ISI Group: Hi, its Mark can you hear me? Sorry about that.

Yes, we can. Mark Schoenebaum - ISI Group: Okay, sorry about that. Hey, I just wanted to ask a quick question on Ramucirumab. The second line lung cancer trial that’s ongoing. Our understanding is that a lot of those patients are Avastin naïve in that trial. Is that something that you could help us, you could confirm or deny possibly. And then what is the hypothesis that Ram may have a better risk benefit in the squamous population than Avastin. And then finally on AWARD-6, is non-purity enough to maximize the potential of that product. And most importantly, congratulations to Phil and Derica on your recognition (indiscernible).

Thanks Mark. We aren’t quite in a level of being inducting to the hall of fame yet, but thanks for the shout. Hey, for the Ramucirumab question, second-line lung, Travis do you want to pick a shot at that. And then Travis or Jan if you want to comment maybe on the hypothesis of why Ramucirumab may or may not be better than Avastin in the squamous population, and then I'll handle the question that you have Mark, on the non-inferiority already for (indiscernible).

So Mark for REVEL which is our second-line lung cancer trial with Ramucirumab plus paclitaxel. I think you asked, and I am going to make sure I get this right, that a lot of the patients and Avastin naïve, so you’re getting to the point where we have allowed for some patients to be treated with Avastin, I would classify that as a small number that patients that will be treated with Avastin in the first line. Mark Schoenebaum - ISI Group: Great. And any commentary on the hypothesis of why we maybe better in squamous relative to Avastin; Jan any thoughts on the two molecules?

Clearly we need to see the final data. And I can just refer to as we have said before that, Ram and Avastin had different mechanism of action, and Ram there not only interferes in a way then with the receptor activation, but it also internalizes the receptor whilst then Avastin is only blocking one of the younger genesis mediators, but in the end we need to see the data.

Yeah, and as we talked about in the past we’ve been very pleased that we say mono-therapy efficacy in advanced gastro cancer, and then obviously reinforced with the combination efficacy that we saw in that similar setting. But again until we have the data from the other tumor types, if I would be pre mature to comment whether the differences that Jan articulated will lead to either tolerability, safety or efficacy differences. And we have no direct head-to-head as well as a reminder. For the non-inferiority for the AWARD-6 trial, this is a trial that is set up with the intent of showing non-inferiority. We have received a number of investor questions, analysis questions over the last month or so around whether we’re attempting to show non-inferiority or whether we’re really hoping in attempting to show superiority. And it is to show non-inferiority versus the highest dose in a forced titration trial of Victoza. There had been two other competitive molecules that have run similar trials and have failed to show non-inferiority. We would definitely look at showing non-inferiority with a high dose of Victoza as being a win in achieving our goals toward that study. If we do achieve non-inferiority we certainly will test for superiority, but it would not be our expectation that that would be a high likelihood at current given the profiles of the two molecules as we know them.

I think the other, this is Jan, likewise I think the other thing is just the presentation of the product to launch weekly format. The straight forward nature of the injection and the injection device which many of our investors were able to see for themselves when we had our meeting here in October, so I think having solid non-inferiority data across the whole broad spectrum of comparators coupled with the product itself I think should give us a light there.

And one of the main reasons for doing the study Mark was essentially from a pricing reimbursement and access perspective. You might do your own research on price levels, but essentially you got a price level in the marketplace sort of base price level defined by BYDUREON, Byetta and the 1.2 milligram dose of Victoza, which means that the 1.8 actually carries a 50% premium to that. So showing non-inferiority with that particular dose we believe would place us in a good stat as we have those discussions with payers downstream. Mark Schoenebaum - ISI Group: Thank you.

You’re welcome. Akhili, next caller please?

We’ll go to the line of Chris Schott with JPMorgan. Chris Schott - JPMorgan: Great, thanks very much. Two questions, the first is on the CDK 4/6 program. Can you just talk a little bit more about the timelines in breast cancer here? I guess specifically once you start the Phase 3, how quickly do you think you can enroll and see outcomes from your study. And while we’re talking about that, can you just also elaborate a little more of the impact you think in early Pfizer filing an approval, if that happened it would have on the competitive dynamics in this space. The second question I had was on diabetes. We’re seeing some of these national formularies moving to a single covered product in any given category not just tier 2 or 3 but a single product. Can you give us, what percent of market in your view is impacted by those national formularies? And once a provider selects a preferred product, how difficult is it going to be or would it be to displace that product once someone is down to the effort of actually moving over in a particular account et cetera, I should understand competitive dynamics going forward as this trend plays through? Thanks very much.

Thanks Chris, so the CDK 4/6, you want to go ahead and start us off Travis.

Yes. So Chris, unfortunately I can’t directly answer your question because we have not yet announced which tumors we'll be pursuing for Phase 3 development, but do hope to – as I mentioned on the guidance call in early January, do hope to get you further data from both lung and breast from our kind of Phase 1b/cohort expansions that we performed as part of that trial in the first half of this year as well as announced which tumors we do intend to take forward in Phase 3 in the first half of this year.

Then on the diabetes questions that you had, Chris, so I don't think we have a percent of covered lives that would be our national formulary, for example, or somewhat like ESI but it is only a portion of their business, for example. I guess maybe a better way to answer your question would be to point that these more highly controlled formularies are a minority of the business in the U.S. I think the best evidence for that is that you can look into the last two, three years as you've seen some of these larger plans switch to sole source for one of the two insulin, you've seen shares moderate maybe by a couple of percentage points in the overall market share for the mealtime insulin. So again, these are a sizable swing but it's not like you're having the majority of the market moving at any one point in time. In terms of switching, there certainly are difficulties in switching so I think payors from our experience don't do this lightly and I think it'd be unlikely over time to be switching every two or three years from one product to another. We continue to think that having multiple products available in the class is in the best interest of patients and actually we think long-term probably in the best interest of payors as well, so they can continue to have a competitive dynamic and not have a significant amount of inconvenience for patients but they're trying to get into their plans as they make these kinds of decisions. So we'll continue to as we have in the past argue for dual access on the various products that we are involved in selling and where that's possible, that's great. If not, then we'll have to make the decisions that we need to make, have our products available to patients here in the U.S. market.

Akhili, next caller please.

That will come from the line of Jami Rubin with Goldman Sachs. Jami Rubin - Goldman Sachs: Thank you. John, this is a question for you. You guys have been kind of quiet on the M&A front. We've seen tremendous amounts of M&A across other sectors in healthcare and I'm just wondering if you can comment on your appetite for M&A? Lilly has been in a rumor recently to be interested in an oncology company, but just talk about the importance of M&A to achieving your goals and what specific areas you'd be interested in? And at the same time, in your discussion about business development maybe if you can throw in there your views on Elanco and how you see that business going forward, if you would consider as some of your competitors have done spinning that business out? Thanks.

Okay. Thanks Jami for the question. On the pharma side we continue to have no appetite for large scale M&A in the pharma business. If we were to undertake smaller kind of acquisitions, I think the best way to think about that is they would have to complement or strengthen areas of focus – our therapeutic areas of focus or provide us with additional coverage or leverage in key geographies. With respect to Elanco, I think we've said that we intend to be buyers and not sellers in the Animal Health space. We've done more or less one or two acquisitions, smaller acquisitions every year for the past five or six years. We've growth this business nicely over this period through a combination actually of inorganic moves and organic growth. We're going to be – continue to be interested in M&A in the Animal Health area that helps us increase our coverage in the area of vaccines and also provide us with a greater presence in some of the key emerging markets. I will say obviously we completed our largest M&A in our history, about five years ago and based on the data that we've seen for ramucirumab and necitumumab, that seems to be playing out quite well. And I'm also pleased that as we begin to exit this YZ period, we do so with a very strong balance sheet.

Thanks, John. Akhili, next caller please.

We'll go to the line of Gregg Gilbert with Bank of America. Gregg Gilbert - Bank of America: I have a few. Thanks John for that very clear description of M&A. If we are to think – for John Lechleiter, if we were to think a 2014 as a year of (indiscernible) which hopefully sets you up for some nice growth for several years based on sort of singles and doubles as the Street sees them, do you think there's any other key shareholder value drivers that investors don't fully appreciate that perhaps are clear in your mind? My other question is on the ram. I know you're ready to launch ram in gastric as quickly after it happens, but do you think the system's ready to provide access for docs to use the product in a broader patient population as is probably the case in your market research? And then AWARD-6, what's the most granular timing you can offer? Phil, I'm sure some folks will ask it after the call. Thanks.

Sure. So, John do you want to start out with the first question, maybe Travis answer the question on ramucirumab and I'll take the AWARD-6 timing question.

Gregg, I think first of all while we intended to get back on a growth trajectory through the launch of new products, I think that the fourth quarter was 9% underlying growth in those products not affected by essentially other than Cymbalta U.S. situation. I think if all goes well for solid growth from this basket of currently marketed products that we have, that's going to be important to sort of underpin our launches in the years ahead. We continue to do very well in Japan. I think our volume growth in Japan for the year was 13%. We're now squarely in that top 20 in Japan. We continue to on an annual basis to more or less lead that market in growth across all of our major competitors; global pharma and the local Japanese company. In China, despite a slowdown, we saw 12% revenue growth in China for the year. I continue to believe that emerging markets represented good investment. Keep in mind, emerging markets are a relatively smaller piece of Lilly's than they are many other companies. I mean typically our larger competitors have about 20% of revenue in emerging markets. I think we're closer to about 12%. I look at that as a key opportunity for growth. We have a great business in Latin America. For example, we're expanding our presence in other countries where traditionally we've not have a presence there. So I think that's another area of interest. We talked about Elanco already. We're very bullish on Elanco's prospects. We see good positive synergies between Elanco and Lilly and yet we believe Elanco has the operating independence that it needs to compete with competitors that are reshaping themselves. I think in terms of value creation, so we're launching a cancer drug hopefully this year and two drugs in type 2 diabetes. Those are launching the infrastructures that are well built out and so we've called that out to investors but I think that's important to keep in mind. The other piece was just the work we've done on infrastructure. I mean this is a different company today than the company of the last decade. We've had to prepare for this very, very difficult period and we've made some choices. We haven't wasted the crisis, as the old saying goes. We're more agile, we're leaner. I think we're better operators today and I believe that will pay off in terms of success to these launches that lie up ahead of us.

Thanks, John. Travis?

Thanks, Gregg. With respect to your question on ramucirumab, obviously we're very pleased that we now have two positives Phase 3 trials for gastric cancer. Look forward to receiving the regulatory action for the regard submission in the U.S. Q2 of this year and then look forward to submitting the RAINBOW data to the U.S. in the first half of this year. Outside of gastric cancer, clearly we're looking forward to getting the data from the three ongoing trials that we have and second-line lung, second-line liver and second-line metastatic colorectal cancer. We'll look to use that data and obviously take that data on board and expand that potentially into further development opportunities for ram. So we're very pleased with the prospects we have with ramucirumab and look forward to giving those three data points on lung, liver and colorectal later this year.

Gregg, the strength of the data will likely also dictate not only physicians' interest in prescribing but also kind of access and the speed of access that we might be able to achieve. For AWARD-6 timing, we would look to press release, the top line results of this study. Although this is not sort of a pivotal study for our registrations, submissions to regulators, we recognize that this trial was of high interest to the investment community so we do intend to have a top line press release of whatever the outcome is and we would expect from a timing perspective that that would be a release we'll be issuing here in the first quarter of the year and hopefully have a chance, if the timing lines up, to present that data at a medical meeting in the middle part of the year. Akhili, next caller please.

We will go to the line of David Risinger with Morgan Stanley. David Risinger - Morgan Stanley: Yes, thanks very much. I have a couple of questions please. First, maybe Derica, you could just talk about any wholesaler inventory changes of note in the fourth quarter and how you finish the year? And then second, with respect to Alimta in the EU, could you please discuss what we should expect from the appellate court of patent decision in terms of timing in ’14 and maybe you can just frame it for us and I’m forgetting exactly which countries this decision will apply to, but if you could discuss that, and I think that covers it. Thank you.

Great Dave. Thank you very much. Derica, on the wholesaler inventory?

Hi, Dave. Good morning. On the whole -- we did have in the U.S some wholesaler inventory build. One other phenomenon we did see also is that while that was building at the wholesaler level, we believe that there was a depletion of inventory at the retail level. So long-term we believe this year, it will work itself out and we’re not concerned about that goal as we think about our 2014 outlook.

Great. And then our Alimta in the EU, Dave, real quick summary of a landscape there, so there is one action you didn’t act -- ask about specifically, but I do want to comment on which is the European Patent Office where the patent itself had been challenged. You may recall that the initial hearing judgment went in Lilly’s favor and that has now been appealed to the Board of Interferences within the European Patent Office. We still have no date for that hearing. Separately from the proceedings in the European Patent Office, there are two countries that have ongoing legal proceeding. The first is Germany where I believe there is a trial that could come as early as March of this year and then U.K. which is in April. In the future, I can tell it will be a single European Patent Court to hear and decide cases, more broadly across the European Union. That's not the case right now, so the cases that will be heard in Germany and U.K. would explicitly apply to those markets in other countries based on those rulings we have to make their own determination. David Risinger - Morgan Stanley: Yes, just one quick follow-up. Can you just give us a framework for what percentage of the ex-U.S Alimta sales come from the EU?

Sure. I will see if we can grab that here relatively quickly from -- the secret book (indiscernible) that you guys have this detail just, if you have not been following this little bi quietly, but in the October call, Q3 call, you may have seen that we expanded the disclosures for product sales, breaking out international sales by the ACE region, which is Australia, Canada, Europe, Japan and emerging markets to respond to some request that we had to provide much more clarity around product sales and particular for Japan and emerging markets. Hopefully you find that as interest. I’m looking actually at the public book now rather than the secret book. So in the fourth quarter our international total Alimta sales were about $394 million. About $235 million of that Dave came from the ACE region. The vast majority of which would have been coming from Europe itself. And we had about another $90 million roughly coming from Japan and almost $70 million from the emerging markets. David Risinger - Morgan Stanley: Got it. Thanks so much.

You’re welcome.

We will go next to the line of Tim Anderson with Sanford Bernstein. Tim Anderson - Sanford Bernstein: Thank you. Couple of questions. One, necitumumab how confident are you that the drug is approvable in lung, now that you have positive results in hand, at your top line last fall and what’s the development program from here? We’ve seen that with positive lung results, you would be pushing into broader development, but I haven’t heard you yet articulate what’s next? Are you going to hold off during anything until you see whether the drug gets approved in lung? And second question on your two insulins, novel basal and insulin glargine, wondering if you can characterize what you think the bigger commercial opportunity would be with either of those drugs, when you look at over say the next five years?

Great, Tim. Thanks for the question. So, in terms of the confidence in necitumumab being approvable and also thoughts on the development plan from here, maybe we will start with Travis and Jan, if you have any thoughts you would like to add and then I will comment on the comment you had on the opportunity with the two basal insulins.

Yes, Tim this is Travis. I would say we are pleased with the top line results of improving overall survival in front line squamous non-small cell lung cancer. Clearly squamous non-small cell lung cancer has been one of those more difficult -- I'll call it more difficult diseases to treat, say vis-à-vis non-squam. At this time, we’re pleased with the risk benefit profile we have and look forward to getting those more detailed data in front of you at ASCO. With respect to next steps, cylinder evaluation as to what next steps may look like for necitumumab development. So hopefully we’ll have more details to share later on that this year.

And then Tim, in terms of the two insulin, so with the insulin glargine product, we see ourselves very well positioned as one of the few companies that’s well positioned to have success with this kind of opportunity given the expertise we have in the space, the ongoing commitment to developing devices over time, strong relationships that we have with physicians. We believe this is a very important opportunity for us to really begin to establish a foothold in the Basal Insulin segment which we’ve really not been participating in up until this point. The commercial opportunity for the Novel Basal Insulin could be very substantial, but it really will depend upon that clinical profile that we see in the Phase 3 trials. There were some very encouraging signs that we saw in Phase 2 as we share with you at ABA and in subsequent meeting with the profiles that we saw for reduction in HbA1c, the weight profile, reduction in all time insulin usage relative to the current standard of care, Basal Insulin which is these are confirmed at multiple, these are confirmed in the Phase 3 trials couldn’t be that probably to have a very substantial opportunity. We have also been very clear that if this product does not differentiate substantially from Lantus, if I’m more likely then not, that it would not be launched and not be a viable product and therefore our efforts we focus really on the insulin glargine product solely. So, again until we see the data it's very difficult to know. We do have trials for the Novel Basal Insulin that began to wrap up late last year with one of them, a number of them then over Q1, Q2 and Q3 of this year we would hope to have enough of those trials in house probably by the middle part of the year, will be able to issue a top line press release updating all of you on the progress to date with those trials. So, encouraged and anxious for those outcomes. Stay tuned for a top line later this year. Akhili, next caller please?

We’ll go to the line of John Boris with SunTrust Robinson. Please go ahead. John Boris - SunTrust Robinson Humphrey, Inc.: Thanks for taking the questions and congratulations on the results. Just on Ramucirumab and your filing in Japan, is it possible just to get an update on the timing of any additional work that needs to go on there and the timing for the filing. And then secondly a question for Jan, just on the CDK 4/6, there’s a lot of preclinical data out there, but what are the main features your advantages and benefits of your CDK relative to the other compounds when you evaluate them and consider taking -- when you consider evaluating to take it into Phase 3 development? Thanks.

Thanks, John. Travis, do you want to start?

Yeah, thanks, John. So we do have a bit of an update versus the guidance call that we provide -- guidance call provided earlier on the Japanese filing for Ramucirumab which is again is to remind folks it's based on the rainbow data where we had about a third of the patients were from Asian countries. So, we look to be able to file that submission by the end of this year.

Jan?

Okay, so regarding CDK 4/6 as you know this is a very exciting area and but what we have seen on our compound and in the initial clinical trials that shows a single agent activity which wasn’t really I think what Pfizer emphasized for their molecules. So here we see a potential efficacy benefit. Further more we can do continuous dosing without interruption based on our safety profile. And there the Pfizer molecule had issues and has to have intermittent dosing and we believe that potentially to have a continuous coverage can gain efficacy.

Thank you, Jan. John Boris - SunTrust Robinson Humphrey, Inc.: Thanks.

You’re welcome John. Akhili, next caller please?

We’ll go to the line of Vamil Divan with Credit Suisse. Vamil Divan - Credit Suisse: Yes, thanks for taking the question. Just two that I have; one on Ixekizumab, I appreciate the update you guys gave there on the trial. Just wondering if there’s any interim reason you could point us to and the timing of when those might occur now just that might lead to the trial or data earlier than the, I guess, 2016 timeframe you mentioned. And the other one just on the autoimmune side, (indiscernible) you had today in terms of biosimilar [ph], just a status of how that the Phase 2b study is going there. And if you could also talk about how you are looking at making a decision there to moving into Phase 3, does it separate from waiting to see the data exceed or is there some – are you going to look to see how those fair against each other just given Lilly's [ph] partnered obviously with (indiscernible)? Thanks.

Okay. Jan would you like to take the Ixekizumab question and Jan and Travis comment on the autoimmune please.

Yes. There is room for an interim analysis on the Ixekizumab which we don't want really to comment on with the exact timing of. If you refer to the ongoing Phase 2 trials, was that the psoriasis indication then where we have data which we are currently evaluating and I think we will communicate the first four but in due course.

(Indiscernible) we actually do look to disclose that psoriasis data in the first half of this year.

Akhili, our next caller please.

We'll go to the line of Marc Goodman with UBS. Marc Goodman - UBS: Yes, good morning. You talked a little bit about the emerging markets. Can you talk about some of the countries where you are making investments? And second, China seems to have slowed in the fourth quarter but it did well throughout the year, so I'm just curious is there anything, is there any trend going on, was there something that happened in the fourth quarter specifically? And if so, has it carried over into January? And then when you answered the question about the biosimilar for Lantus before, I wasn't sure whether – did you confirm that you've actually filed a Paragraph 4 and notified the branded company? And then third just on diabetes, how do you see this market playing out with respect to the SGL-2s and the DPP-4s and are you hearing anything behind-the-scenes on how (indiscernible) is doing and if the SGL-2 is moving in front of DPP-4 as far as therapy? Thanks.

Thanks, Marc. We'll have Derica answer the first question about emerging markets, where we're investing and what we're seeing in terms of the growth in the fourth quarter and then I'll take your diabetes questions.

Sure. Marc, in terms of the emerging markets, as John indicated earlier, clearly China is a key beachhead at least for Lilly within the grouping of emerging markets, but other markets such as Brazil, Mexico, Korea, Russia, Turkey as well as India are key footprints for us as we think about leveraging some of the key therapeutic areas that are doing well in those markets today which are diabetes and oncology, which is obviously a quarter of what we do. So we continue to see emerging markets as a strong opportunity for us. In regards to your particular question around China itself, overall we have seen the China market growth slowing, okay, so that is a factor that we're picking up, but it's still very robust when you compare it relative to the rest of the world. So, we don't see backing off investment and our focus in that market. Another factor that we believe is affecting the growth in that market at least in 2013 was the anticorruption scandal that was going on there and it was really affecting primarily the multinational big pharma companies there. Hopefully that will begin to subside as we were closing our 2013 and we're not anticipating any significant re-impact in that in 2014.

Then Marc on your question for [Technical Difficulty] actually quite pleased to see the kind of uptake that (indiscernible) has experienced in the U.S. marketplace in particular. There was a lot of discussion prior to the approval and launch of that product that many observers were thinking this product class was not going to have a significant adoption by physicians. So I think we're pleased as observers who could be coming relatively soon with one of our own and also potentially the first to have a combination product of a DPP-4 with a SGLT2 but there seems to be pretty good acceptance for this mechanism and the efficacy, tolerability, safety profile that at least the (indiscernible) carries. So we're looking forward to coming into the marketplace ourselves as well. The DPP-4 market growth has slowed, in part due to the uptake of canagliflozin. We do expect long-term with the underlying demographics and market dynamics, we'll continue to see robust growth in both of these areas of the oral diabetes class; so looking forward to participating in both these classes going forward. Akhili, next caller please.

We'll go to the line of Alex Arfaei with BMO Capital Markets. Alex Arfaei - BMO Capital Markets: Good morning. Thank you for taking the question. Following up on the SGLT2, are there any updates on the manufacturing issues you discussed on your last call? And when can you expect a resolution? And also you don't have the ample Phase 3 trials listed as external readout. I'm wondering if that's for competitive reasons or whether it's up to your partner. Thank you.

Great. So I'll take you questions. Alex, this is Phil. May take the second one first. We actually had many of those trials presented at ADA last year and that was sort of the big coming-out party, if you will, for the data from that Phase 3 program. Not all of the trials were presented there. So as we go through 2014, I'm sure we'll additional data presentations. But again, the bulk of that data wasn't presented at ADA last year. In terms of the timing on the manufacturing issues, the re-inspection, the BI [ph] we'll be having pursuant to their warning letter, there are no updates at this point in time. As we mentioned on the guidance call, there is re-inspections scheduled for the first quarter and also coming up in the not-too-distant future have the potential action date for the submission that we have from PEG lispro [ph]. So we'll keep you guys appraised as the situation evolves, but there are no updates from earlier this month. Akhili, next caller please.

We'll go to the line of Seamus Fernandez with Leerink. Please go ahead. Seamus Fernandez - Leerink Swann: Thanks very much. So I have a few questions. First, regarding PEG lispro, do you have any new data either from Phase 3 or other ongoing studies in-house? And if so, do these data provide any greater comfort around the liver safety of PEG lispro? Second on necitumumab, did the SQUIRE study include any pre-specified biomarker evaluations? And if so, could you just disclose what these pre-specified analyses were? Third, on CDK4/6, can you remind us the specific expansion cohorts that will see more data on this year and maybe remind us the percent of lung cancer patients that have K-Ras mutant status? And then the last question is finally can you just update us on your plans for your TGF-beta in liver cancer given some of the promising data that you presented at ASCO-GI I believe? Thanks.

Okay. We were furiously writing everything here, so let's see if we got all these. So, let me start out with the PEG lispro question. As I mentioned earlier we have begun to have the first trial essentially wrap-up in that program. We won't provide a running commentary as a single trial comes out as we've done, for example with the dulaglutide trials where we waited until we had AWARDs 1, 3 and 5 before issuing a top line press release. We'll be doing the same thing with the studies for the Basel insulin PEG lispro. And then Squire, this was out of pre-specified biomarkers. I don't know, Travis, if you're able to find anything in our – we need to get back to you, Seamus, on the pre-specified biomarker question. I think there were some there but we don't have the details with us. So we'll follow-up on that one. The CDK 4/6, the expansion cohorts, do you want to comment what those were, Travis?

Yes. Those will be – we did expansion cohorts for a few tumors coming out of that Phase 1b. Most prominently were breast and lung, but I believe there were a couple of others, melanoma and potentially one other that I need to follow-up on, Seamus.

And there was a question on percent of K-Ras mutant, and Seamus were you asking about that with regard to colorectal or with regard to lung or what was your – I missed the tumor type you were asking about? Seamus Fernandez - Leerink Swann: More with regard to lung.

Okay. We may need to follow-up on that, because I don't think we got that date with us. John, do you have anything on that one?

No. I think I can just say that we have included the K-Ras mutant as one potential interesting area.

And then the TGF-beta data presented as part of the recent medical meeting was definitely very encouraging. The team is working through, so what the next steps are for development of that molecule. And I think probably later this year that we can hopefully have an update for you on those plans. Seamus Fernandez - Leerink Swann: Okay, great. Thank you.

Thanks, Seamus. Akhili, next caller please?

We will go to line of Jeff Holford with Jefferies. Jeff Holford - Jefferies & Company: Hi. Thanks for taking my call. Just two questions around diabetes. First, if you could just -- a bit more color on the pricing you’ve put through any recent pricing increases across the insulin portfolio as well as just a cumulative last 12 months price increases you had across the portfolio. Also just another question around the insulin glargine product. I think I’m correct in saying you don’t -- you have a device that’s sort of public on notable use that is suitable for administrating a basal insulin in terms of the number of units that’s required. We are unable to detect any patent application for such a device. So maybe if you could just talk about that a little bit where you sort of think you’re and what’s your long-term game plan with devices for the insulin glargine? Thank you.

Okay. So for the price increase piece you have, I don’t think we have that with us. You can follow on Jeff after the call on the recent price increases. There were a couple of different price increases over the course of 2013. I think the last one in December, but we can follow-up you with the specific numbers for those. For the presentations we’d use for commercialization of the insulin glargine product, we’ve not been specific on our plans other than the state that we’re definitely looking at multiple options. We also believe that we’d be in a position to commercialize that products upon expiration of the Lantus compound patent in early 2015. Jeff Holford - Jefferies & Company: Thank you.

You’re welcome. Akhili, next caller please?

There are no further questions in queue from the phone.

All right, great. Well, thank you very much for your attention on today’s call. We appreciate your interest in Eli Lilly & Company. Going forward, we will continue to do what we did today and on our guidance call, which has to exhaust the questions in the queue. Hopefully you will find that helpful to get your questions answered in a timely manner. We look forward to interacting with you at upcoming meetings, conferences, and keep you appraised of our progress which hopefully will be considerable this year in advancing the pipeline and beginning to launch new products to position ourselves for growth coming out of 2014. Have a great day.

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